METALS-Copper gains as dollar falls, but analysts wary

* LME copper heads for fifth weekly rise

* Analysts raise doubt whether the rally can continue

* Tin jumps more than 5 percent on fund buying

LONDON, April 17 - Copper rose on Friday as the dollar turned lower and European equity markets held to gains, while tin rallied as much as 6 percent on fund buying.

Copper for three-months delivery on the London Metal Exchange closed at $4,803 a tonne versus Thursday's close of $4,729, and off an earlier session low of $4,675.

European shares rallied after Citigroup <C.N and General Electric posted better-than-expected quarterly results.

But the dollar took its lead from weakness on Wall Street. A weaker U.S. currency makes metals priced in dollars cheaper for other currency holders.

Analysts warned, however, that the copper rally would likely run out of steam.

"Zinc, lead and copper have all had amazing rallies... In the short term things will hold ground or maybe go down a little bit lower," said Citi analyst David Thurtell.

"Demand is still pretty anaemic."

Upbeat economic data from the United States, one of the top copper consumers in the world, coupled with continuous drawdowns in inventories, sent copper to a six-month high just below $5,000 a tonne earlier this week.

Prices of the metal used in power and construction have surged more than 50 percent so far this year in London, and are up nearly 4 this week, their fifth consecutive weekly increase.

On Friday, inventories in LME registered warehouses fell by 5,575 tonnes to 469,625 tonnes, having fallen nearly 80,000 tonnes since mid-February.

CANCELLED WARRANTS

Cancelled warrants -- stock already tagged for delivery -- eased to 64,400 tonnes from 66,275 the previous day. Stocks in Shanghai warehouses rose by 3,969 tonnes.

"Metal keeps flowing into China but at these prices we strongly believe the State Reserves Bureau is out of the market. No one really seems to know where it's going," a trader in Sydney said. Some analysts thought the trend is not sustainable.

Copper cathode imports have surged exceeding the early 2007 peak but total copper imports were up more modestly as scrap and concentrate imports fell, Citi analysts said in a research note.

"Is it sustainable? Probably not," the bank said. "Cathode imports are being driven by a shortage of scrap, stock building and SRB buying, and is probably well ahead of demand."

Last month China's refined copper output slipped 0.2 percent from February's three-month high to 319,400 tonnes as producers ran short of copper scrap, a raw material, and smelters held back from full production because of weak demand.

Dominant positions controlling more than 90 percent of cash warrants on LME stocks and fund buying have bolstered tin prices, which closed at $12,250 a tonne -- its highest level since late January -- from Thursday's $11,550.

Supply worries for the metal were reflected in the premium for cash material over the three-month contract at $88 a tonne. That was below levels above $200 seen last week, but it above the $32.5 seen in early February.

Lead was supported by similar factors. The premium for lead was small at about $3, but compared with a discount of about $16 in late March.

Zinc ended at $1,557 from $1,495 on Thursday, while lead was at $1,555 from $1,504.

Aluminium was at $1,486 from $1,482 and nickel closed at $12,850 a tonne from $12,450. Nickel hit a day's high of $12,884, its highest since early January.

For graphics showing copper and aluminium stocks. http://graphics.thomsonreuters.com/apr09/GLBCPSTX170409.jpg http://graphics.thomsonreuters.com/apr09/GLBALSTX170409.jpg